The JOBS Program I. INTRODUCTION How successful has the JOBS program been in fulfilling the high hopes placed in the program by two successive administrations? What kind of a return is the Nation receiving on the substantial investment it is making in this program? How does that return compare with the results of other manpower programs? What role should the JOBS program play in any future "comprehensive manpower policy"? Those were the principal questions which the subcommittee staff had in mind as it began its preliminary study of the JOBS program. Certainly there was no question that, for several reasons, those most directly involved in administering manpower programs had a special degree of optimism about the JOBS program. First, this program offered hope of enlisting massive participation by the private sector in the urgent problem of finding jobs for the hard core disadvantaged. It was obvious that unless private business and industry could absorb significant numbers of unemployed persons who lacked job skills, basic education, and good work attitudes, there would be little hope of dealing with the explosive problem of widespread unemployment within the deeply troubled areas of our major cities. Secondly, the JOBS program offered something few other manpower training programs could offer, in that every trainee entering the program started out with a job. "Under JOBS, the job comes first," commented Richard C. Mottu, Pittsburgh metropolitan director of the National Alliance of Businessmen. "The NAB motto, 'Hire, train, retain,' indicates that trainees must be hired first." By contrast, Mr. Mottu pointed out, other manpower programs often train persons for jobs which never materialize. "This results in frustration to the trainee who may feel that he has experienced just another false promise and may be inclined to fall back further into the ranks of the chronically unemployed." POLICY IS EXPLAINED These basic features of the JOBS program help explain the great appeal it held for the present administration when a major reorganization of Federal manpower programs was begun early in 1969. Dr. Sar A. Levitan, director of the Center for Manpower Policy Studies at George Washington University, summed up the new administration's manpower policies in a recent paper: President Nixon has consistently supported the idea that the private sector should take a more active role in manpower programs. The ideology of the "new federalism" is that centralized administration should be reduced and the role of the State and local governments expanded, and that The most striking changes during the first year of the When the administration announced in the spring of 1969 that it planned to close 59 Job Corps training centers for the disadvantaged, eliminating some 17,500 training opportunities, it emphasized that at the same time it was more than doubling the JOBS program. 140 THOUSAND JOBS FORESEEN The Secretary of Labor testified before this subcommittee on June 5, 1969, that about $200 million had been appropriated for the JOBS program in fiscal 1969 and that "we have asked Congress for $180 million from Economic Opportunity Act funds for fiscal 1970 which, together with $240 million of MDTA funds, would provide the money necessary to finance 140,000 jobs-75,000 more than in fiscal 1969" (p. 485, Senate hearings on Economic Opportunity Amendments of 1969). A table submitted by the Labor Department indicated that training opportunities for fiscal 1970 under the JOBS program would total 140,000-80,000 financed under the Manpower Development and Training Act and 60,000 under the Economic Opportunity Act. These figures in the Labor Department table helped to produce a total of 1,022,280 total training opportunities for fiscal 1970 as compared with 909,040 for fiscal 1969. This announcement found a popular response in the Congress, where considerable concern had been expressed by members of both parties about the possibility of a cutback in training opportunities for the disadvantaged. Some of the comments made by various Senators on the floor of the Senate on May 13, 1969, as the Senate discussed changes in the manpower programs were as follows: We have heard a great deal about the $100 million budget reduction in the Job Corps, but there are substantial increases in youth opportunities in the overall manpower program, of which the Job Corps is only a small part. For example, there is a $200 million increase in the private industry/Government program for hard-core disadvantaged-Job Opportunities in the Business Sector (JOBS)-which increases training slots for out-of-school youth in that program alone from 28,800 in fiscal 1969 to 60,500 in fiscal 1970-an increase, if my mathematics are any good, of about 31,700 (p. S. 5132, Congressional Record). ... If we deduct $100 million from the Job Corps, how can we give more special training? The answer is that we add more than $200 million to the JOBS program. So we are not dealing with the situation of putting the dollar above the man. We are dealing with a new administration which says, "Give us a chance to show that we can do a better job, and train more people to greater effect and at a lower cost ratio for this number." (p. S. 5157, Congressional Record). While the Job Corps enrollment would be down from 70,000 this year to 47,000 next year, the number of out-ofschool youth in the JOBS program, the program conducted with private employers by the National Alliance of Businessmen, will rise from 28,800 to 60,500. This will come about, incidentally, as the administration plans to put JOBS programs in 125 cities rather than the existing 50 cities (p. S. 5162, Congressional Record). Those comments illustrate the high hopes held for the JOBS program less than 1 year ago. It was clear that many of those responsible for manpower programs believed that the JOBS program offered hopes of a significant breakthrough in job training for the disadvantaged, sufficient to justify a massive commitment of resources even at the expense of cutbacks in other programs. RESULTS ARE CONSIDERED What are the results, 1 year later? The annual manpower report of the President, issued in April 1970, conceded that the JOBS premise "is not yet fully tested." It stated that the program has had startup problems, the most serious of which has been high turnover. The manpower report took brief note of the problems which an economic slowdown could hold for the JOBS program. But it concluded that JOBS on the whole "is meeting its objectives." "In fact," the manpower report said, "close to 300,000 disadvantaged workers had been taken on by independent company efforts through January 1970 while well over 80,000 had been hired under JOBS contracts with the Department of Labor." Even more enthusiastic has been the National Alliance of Businessmen, which has issued regular press releases recounting a steady upward spiral in JOBS pledges. "The Alliance reported a few days ago that its efforts thus far had resulted in the hiring of 360,140 hard-core unemployed, most of them Negroes in the inner cities," the Superior (Wis.) Evening Telegram said in an editorial on March 18. On February 27, 1970, the Washington Post quoted Donald M. Kendall, president of Pepsi Co., Inc., and former chairman of the NAB, as stating that NAB would "meet its goal of providing 338,000 jobs by June 30." The goal for July 1, 1971, is 614,000 jobs. INTERPRETING STATISTICS A major difficulty in evaluating this program, which stirs such enthusiasm from both the administration and its directors within the private business community, lies in the problem of interpreting the statistics which are used to illustrate its progress. The Secretary of Labor's figure of $420 million for JOBS in fiscal 1970 has not been realized. The administration has already revised its estimated expenditure to $300 million, and it is doubtful that even this much will be used. With the fiscal year less than 3 months from completion, the commitment of funds is well below this level. Since much of the money committed is never actually spent (few firms hire and retain as many trainees as they fund training slots), actual expenditures should be even lower. (See Malcolm Lovell letter, p. 110, and Secretary Shultz letter, p. 114.) As for the "140,000 jobs-75,000 more than in fiscal 1969" which the Secretary of Labor cited in his testimony of June 5, this goal has not been met. A Labor Department press release dated March 20 (under the headline "Jobs Hires Nearly Triple") reported that "employment under contract programs reached a new high of 37,000, an increase of 23,000 * ** over the January 1969, figure." The high turnover rate mentioned by the manpower report of the President is a real and serious problem. As of January 31, 1970, 414 MA-3 contracts-the first contract available under the JOBS program-had been signed, and most of them were approaching completion. Some 45,300 persons had been hired by this date, of whom 14,564 remained on the job, for a retention figure of 32.1 percent. Not all of those terminated, of course, are necessarily out of work. The General Accounting Office, in an analysis of 8,000 termination cards, concluded that 8.9 percent of JOBS trainees leave for good reasons-to take jobs at higher pay, to return to school, or enter the Armed Forces. If this estimate were to hold true throughout the program, the retention rate under the MA-3 contracts might be considered as 41.0 percent. In reading figures published by the National Alliance of Businessmen it is important to note that they are often a total figure composed of both those trainees hired under Government contract, and persons reported as disadvantaged and hired by firms participating in the JOBS program without Government recompense. As will be shown, the statistics for the voluntary part of the program are subject to serious question, and in general are not verifiable. Thus goals such as 338,000 to be hired by June 30, 1970, or 614,000 to be hired by July 1, 1971, are total hires-neglecting terminations-under both the voluntary and contract portions of the NAB program. EFFECTS OF A COOLING ECONOMY The most serious question about the future of the JOBS program is this: Is such a program viable in a cooling economy? The JOBS program was established during a period of extremely low unemployment. It was proposed and established at a time when the most persistent problem of unemployment concerning manpower officials was to be found among the hard core disadvantaged. Thus a massive, well-financed campaign to eradicate this last vestige of persistent unemployment was both appealing and feasible. But the very features which made the JOBS program such a hopeful weapon-"hire first, train and retain"-as compared with other manpower programs also make it particularly vulnerable to an economic slowdown. Businessmen simply cannot be expected to simultaneously hire the disadvantaged and lay off their regular workers. The letters which follow will show this graphically. Not only are fewer workers now being hired under the JOBS program, but many of those previously hired are being laid off. Governed |